Don’t Put Off Until Tomorrow What You Can Do Today
You keep telling yourself, “I’ll do it tomorrow.” But what happens when tomorrow doesn’t come? I’m not talking about the end of the world or putting off doing the dishes. I’m talking about making a Will or a Living Trust.
It has been estimated that more than half of all Americans die each year without a Will or a Living Trust. That means that more than half of all Americans didn’t even have a say as to what happens to their property and assets upon their death. Or who was going to take care of their children or even their pets.
Without taking the time to plan for your estate after your death you may be leaving quite a mess for your family to deal with. Your entire estate could end up in Probate Court from anywhere to a few months to several years. And during this time your family may not be provided for as you might have wished.
Contact one of our knowledgeable Sacramento Estate Planning Lawyers so you can feel secure in knowing that, in death, your wishes will be fulfilled exactly how you wanted.
What is a Living Trust
A trust is an arrangement under which one person, called a trustee, holds legal title to property for another person, called a beneficiary. You can be the trustee of your own living trust, keeping full control over all property held in trust.
A “living trust” (also called an “inter vivos” trust) is simply a trust you create while you’re alive, rather than one that is created at your death.
Different kinds of living trusts can help you avoid probate, reduce estate taxes, or set up long-term property management.
Estate Planning Mistakes: Where Heath Ledge and Princess Di Went Wrong
What do Princess Di, Marlon Brando, Heath Ledger, Jimi Hendrix and former Supreme Court Justice Warren Burger have in common? They all flubbed their estate planning, costing intended heirs money and/or grief, according to a readable (really) estate planning how-to book, Trial & Heirs. The new book uses these celebrity cliffhanger cases to dish out real-life advice.
The mistakes these folks made run the gamut. Jimi Hendrix died without a will, leaving his close brother Leon with nothing. Supreme Court Chief Justice Warren Burger wrote his own will, which at 176 words left out basic tax clauses that could have saved $450,000 in estate taxes. Princess Di relied on a “letter of wishes” to give away belongings, and her godchildren got shortchanged.
Everyday people can learn from these celebrity stories… For example, in a case reminiscent of Princess Di’s mistake, it is not uncommon for children to fight over a typewritten list saying who gets what from their late mother’s valuable collection of jewelry or various possessions. If there mother did not sign and date the list, which is something her living trust required… Enter the lawyers.
There would have been a way to avoid this messy fight, as is the case with many estate disputes. In the case of the mother that did not sign the list of possessions, she could have modified the living trust and simply said to the Law Firm, ‘I want to do a list’. THe firm could have worked with her to do it the right way. In Princess Di’s case, she should have included such substantial bequests–stuff worth 100,000 pounds per godchild–in her will and not left the doling of her belongings to the discretion of her executors.
Some celebrities did try to head off problems. Just 18 months before he died, Ray Charles held a Christmastime family meeting with his 12 children and their nine different mothers. That saved the heirs some grief, and alerted them that he had prepared trusts for their benefit, but that he would leave most of his assets to charity. (Alas, his estate still became embroiled in fights over who would control the rights to his image, known as publicity rights, a major detail left out of his estate plan).
In addition, you need to update your plan if you move, marry, divorce or have children. Out-of-date documents can lead to trouble. Heath Ledger didn’t update his will after the birth of his daughter, Matilda Rose, so when he died at age 28, his assets went to his dad, which led to family disharmony before an eventual promise by the dad to take care of Matilda Rose.
When you do update, make sure you don’t leave multiple, conflicting sets of documents or instructions. Eleanor Close Barzin, the daughter of Marjorie Merriweather Post (who during her life was often called America’s richest woman) died in 2006 with multiple wills. As detailed recently by Forbes, the family is still caught in an estate fight, with lawsuits or estate matters filed in Washington, Baltimore, New York, Paris and Switzerland.
Another battleground can develop if an executor–the person in charge of the estate–doesn’t seem to be doing right by the deceased. Tobacco heiress Doris Duke, who died in 1993 with a fortune estimated at $1.3 billion, named her butler as executor and as trustee for a huge charitable foundation. After the butler’s lifestyle and spending habits were called into question, he was removed from his duties by a probate judge, then reinstated by New York’s highest court. A settlement agreement created a board of trustees to manage the foundation.
Duke should have realized her butler wasn’t equipped to manage a billion-dollar foundation. Pick your executor and trustee carefully. Don’t just pick the oldest child or closest relative, but someone you trust who is competent for the task and willing to do the job right–and is ready to take on any fortune fights.
Article from Forbes.com.